Imagine a type of discrimination where firms act as if they pay wf+df when they hire a female worker and wm when they hire a male worker. Where df is a discrimination coefficient. A) If female and male workers were the only inputs, what is the profit function for the firm? What is the firms profit maximizing demand for each type of labour? B) If the marginal product of male and female workers is the same, and if df = .1, what is the ratio of male to female wages? What does it mean to have a discrimination coefficient of .1? Carefully explain what it means.
Imagine a type of discrimination where firms act as if they pay wf+df when they hire a female worker and wm when they hire a male worker. Where df is a discrimination coefficient. A) If female and male workers were the only inputs, what is the profit function for the firm? What is the firms profit maximizing demand for each type of labour? B) If the marginal product of male and female workers is the same, and if df = .1, what is the ratio of male to female wages? What does it mean to have a discrimination coefficient of .1? Carefully explain what it means.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Imagine a type of discrimination where firms act as if they pay wf+df when they hire a female worker and wm when they hire a male worker. Where df is a discrimination coefficient.
A) If female and male workers were the only inputs, what is the profit function for the firm? What is the firms profit maximizing demand for each type of labour?
B) If the marginal product of male and female workers is the same, and if df = .1, what is the ratio of male to female wages? What does it mean to have a discrimination coefficient of .1? Carefully explain what it means.
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